If you were just a few years from FI and not loving your job, would you leave it? Sure, wine not?
Olaf did just that and now splits his time between two part-time jobs, one of which has him setting up tastings as a wine ambassador. That sounds like a job that someone might hang onto well past the FI inflection point.
A frugal fellow, who is working on loosening the purse strings, would like to know how you find balance between saving for the future while enjoying the present, all while making progress towards financial goals. If you’ve found a formula that works for you, please weigh in down below after reading Olaf’s story.
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Getting to Know You
Where are you on your financial independence journey? Have you crossed the halfway point in terms of net worth and/or passive income?
In my opinion, we are financially independent as we can go decades-plus without a job. However, in terms of traditional FIRE, we crossed the halfway point last year for leanFIRE and this year for fatFIRE.
With our home equity included, our net worth is equal to our FIRE goal. As a result, we are thinking of creative ways to capture the equity in our home and put this non-productive asset to use. As to whether that will come to fruition, only time will tell. Without our home equity, we are anywhere between 5/8 and 7/10 of the way to full FIRE.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
I am part of a fantastic two-member household, plus a rambunctious tabby cat,that is beginning its thirties. My better half and I became engaged earlier this year after I popped the question five years in the making.
We are currently enjoying life just outside of the Mile High City on one of the nearby mountains since the open space is calming and allows for hikes and mountain bike rides at a whim’s notice.
As natives, both of our families reside nearby, and fortunately, they are financially independent due to robust savings habits which they instilled into us.
In what field are you working? How is your career going? What do you like best and least about your chosen profession?
I work in two fields: finance and wine. I work part-time both as a financial and educational advisor at a small investment advisory firm and as an ambassador for a boutique winery.
I am delighted with my work because I do not work nine to five, and my schedule is mine to make each day. I wake up each morning and pull one to two shots of espresso. Then I either start blogging, working, or hop on my bike since the trails are two minutes from our doorstep. Each day is different, and I love it.
Currently, my career is in an interesting place. Earlier this year, I had worked for one of the largest asset managers in the country, grinding away and climbing the corporate ladder. While I moved up extremely fast, I found myself drained and feeling like an imposter, as working for someone else’s goals instead of mine was wearing.
I began crunching the numbers and realized that I had financial independence, not in the traditional sense of retiring now, but enough to last more than two decades. So, I quit with a sabbatical in mind.
Do you feel you’ve come to a crossroads of sorts? If so, tell us about it. What options are you contemplating?
Absolutely! I have struggled with work, saving, frugality, and purpose ever since graduating college. You see, I have obsessive-compulsive tendencies and often dive head over heels into goals, running at 110% until I cannot anymore.
Thus, as discussed above, I quit my previous job when I couldn’t tolerate it. Despite being promoted three times in less than two years, I lacked fulfillment by chasing the corporation’s goals.
Financial advice is challenging on its own, as it requires you to be a therapist – after all, money is emotional, not mathematical. Coupled with the fact that I worked in a phone center, my job felt very anonymous and statistically driven. Take X number of calls and help Y number of people plan for their future, for example.
Earlier this year, the department head changed, and the new leader drove an initiative for higher efficiency while maintaining purposeful client interactions. I do not see these goals running congruently. Instead, I believe they run perpendicularly, intersecting at a certain point but diverging as efficiency is mandated.
So, after raising my concerns directly in a town hall and being dismissed, I began crunching the numbers and reflecting on life. I soon realized the fallacy I had been chasing. I didn’t want FIRE; what I wanted was FI and could care less about RE.
For me, purpose in life is about enjoying what you do and doing it on your terms, without constraints. By following this model, you can impact those around you and improve the world, regardless of whether it is a financially fruitful endeavor – for example, my blog, Mile High Finance Guy.
However, getting to the point where you chase your passions requires saving and a lot of it.
When I first began my FIRE journey six years ago, I cut my expenses down to a very slim operating budget, depriving myself of many things. Despite making $70,000 a year, I gave myself a discretionary budget of $300 a month. Unfortunately, this led to me being cheap.
However, as my income grew from five to six figures and my savings rate eclipsed the 60% mark, I started easing off the extremes of frugality to value spending. I no longer have the stigma of being cheap, and my friends and family respect my spending and saving habits.
Still, getting to the point where I didn’t guilt myself for financial purchases was an arduous journey after going hardcore on the frugality train. But I am a recovering frugality addict. The upside is that I amassed substantial wealth in a brief period, which enabled me to be free and financially independent.
As a result, my definition of FIRE has changed. My partner and I have enough funds to last us twenty-plus years, so I see no reason to overlook chasing our dreams now.
So, after quitting to take a sabbatical, I soon found myself with job offers and accepted one working part-time as an advisor and educator for a small advisory firm. I make about half of what I made before but am still saving half of my income. And the upside is, I never feel like I am working.
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
- 40% in US Large Cap (of which 70/30 is index/active)
- 20% in US Small Cap Value Indexes
- 20% in US REITs Indexes
- 20% in International Total Market Indexes
I allow for a 5% drift in my portfolio but rebalance once this threshold is crossed.
I invest my REITs in my HSA and Roth, my active Large Cap funds in my Roth IRA, and other positions amongst my tax-deferred, after-tax, and Roth accounts. I am a big proponent of tax-efficient investment location-based investing. I.e., holding assets where they make the most sense due to the tax code.
Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?
Primarily in taxable, post-tax accounts. However, it is nearing half and half with the gains in my Roth accounts.
Do you have investments in an HSA? How about 529 Plans?
I do! I only invest my HSA in REIT indexes, as I find them the most tax-efficient location. Because REITs are not taxed at the corporate level, generate returns that can be non-taxable, and the HSA is triple tax-advantaged, my HSA and investments work in unison to provide growth and optimal tax advantages.
Regarding 529 plans, we started one even though we do not have a child yet. Someday, we plan to change the beneficiary to our child from me since the tax code allows for this. If our child doesn’t go to college, that is fine, as the 529 can be used for primary education expenses along the way.
What has been your best investment?
In recent memory, FZAHX. It is an active large-cap growth fund only available in 401(k) plans, and I have a smallholding of it. It contradicts my views on active funds, but I view it as my “fun” money.
However, over the long term, FXAIX/FNILX/VOO have been my best-performing investments and all track the S&P 500. I hold VOO in my taxable accounts due to the tax-efficient nature of ETFs and FNILX in my tax-advantaged accounts. I used to have FXAIX but switched to FNILX due to the zero expense ratio and comparable performance.
Your worst investment?
Currently, FREL. REITs were hit hard with the Corona Crash last year and have been slower to recover. Still, historically they lead to lower portfolio volatility and more significant returns over the long term, so I am holding them with no end in sight.
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Into the FIRE
Numerically, what is your FI goal?
Around $1.4 million.
When do you suspect you will achieve financial independence? Will you retire from your career once you’re comfortably FI?
As I noted earlier, I believe we have reached FI, just not RE. To achieve full FIRE, I think that we are another five years out since I sliced my income in half. We could have reached it sooner, but the stress of working my previous job was not worth it, so our savings ability has reduced. Still, this came with a substantial increase in the quality of life, so it was worth it.
I remain skeptical that I will stop working entirely, as I love teaching finance and sharing knowledge. Even if I stop working part-time, I would likely start volunteering.
What are your post-FI plans? How will your life change? What do you look forward to the most?
Since my FIRE view has changed, I think life post FIRE will be very similar to life as it is now. We go out to eat once a week at fun restaurants and, with COVID, have done several local vacations – usually, we make international trips.
The most significant change I foresee is extended domestic and foreign travel. While we could do this now, COVID is a major prohibitor. Additionally, my fiancé plans to stay in her current job for some time, as she loves it. Once this changes, we likely will travel more since she doesn’t have this flexibility at the moment.
Have you made any major changes in your lifestyle or investments to accelerate your FI path?
On the contrary, and as notated above, we have decelerated our FIRE path to enjoy more of the present. Slicing my income was terrifying, but it was the best decision we could have made. I found a part-time job by chance, and my day-to-day content has increased dramatically. As a result, our relationship is doing fantastic.
Are you facing any unique challenges making FI or RE more difficult?
At present, no, but that could change. I was plagued with costly medical issues the past three years, but after multiple surgeries, I am finally returning to 100%. Hopefully, next year will be the first in many where I don’t reach my maximum out-of-pocket limit for health insurance.
What advice do you have for others who are seeking financial independence?
FIRE is an aspirational journey with a vast potential reward, but don’t lose sight of the trip for the end goal. There is little point in living a life where you cannot enjoy the present because of a pursuit that resides in the future. Plus, if you cannot enjoy the now, what makes you think you will be once you reach $X?
Learn how to balance the present and the future, and you will thrive. The whole point of a musical composition is to enjoy the journey, not to reach the final chord, as Alan Watts poetically put it.
You previously mentioned you work part-time in the wine industry. Would you elaborate on that?
Sure! I have worked part-time in the wine industry for many years now. My job entails running a direct-to-consumer wine program and doing in-person tasting events – when the pandemic isn’t raging. Since this job is enjoyable and the perks are great, I don’t consider it a job.
I stumbled into this work years ago through a friend of a friend, and the owner and I have developed a familial connection. It has allowed me to travel extensively and created lasting memories.
The one downside to this job is tasting wine at 9 am on occasion; I do not find that enjoyable! [PoF: Have you tried beer at 9am? It’s delightful!]
Any parting thoughts on your situation?
I have been very lucky and strategic in life. Nevertheless, I recognize that not everyone has the luxury to up and quit their job on a moment’s notice. When you are dealt a good hand, play it to your advantage and when you aren’t, make sure you keep playing until you get a winner. I have had many ups and downs, and I am grateful every day for where I am at.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
Yes, thank you for asking! My biggest question for the hive is frugality: How have you best balanced frugality and pleasure spending in your own lives, and what tips do you have?
Additionally, if any of you have had major surgery before, did you find that you could return 100% to your pre-surgery athletic abilities? I am nearing there, but I am unsure 100% is a reasonable goal.
Thanks for your answers, PoF readers!
PoF: Catch all the future interviews from those just getting started, at a crossroads, or at the end of their FI journey with a free subscription to Physician on FIRE.
I’ve shared my feedback privately with today’s guest. I wouldn’t want my opinions to influence yours. Please give your take in the space below!
Again, if you’d like to partake in a future Q&A, please download a FIRE Starter, FIRE Crossroads, or Post-FI Notes interview form.
15 thoughts on “FIRE Crossroads 006: Mile High, Mostly FI, Working in Finance and Wine”
What is the point of having this post in a forum for physicians ? $1.4M FIRE goal !! Many physician families and readers of this website make that much in a year.
I feel this post doesn’t add any value to most readers of physicianonfire.
Just my 2c
Can’t please everyone!
While a few percent of readers may have before-tax income in that range, it’s certainly at the far right of the bell curve.
I agree that most readers will want more than $1.4 Million to retire (keep in mind this was written in 2020 before the recent inflation), but I also believe one can learn from people with different perspectives and spending habits, even if they’re very different from your own.
I dislocated my shoulder and tore my labrum in April playing soccer and I’m still recovering. I’ve avoided surgery so far and been doing a lot of physical therapy. I doubt I’ll get back to 100% but I think 95% is a reasonable goal. Since you had surgical repair, I think you might be able to get to 100% with time. Thank you for sharing your story.
Thanks for sharing! Great story.
Re: frugality. Lots of ways to skin that cat, of course! For us, it’s been “long, consistent and moderate” frugality in the everyday things – HVAC, groceries, clothes, home decor, etc., and choosing needed big ticket items that cost way below our means. Then, we’ve had all the post-investment financial room we need for splurging on what matters most to us. Also, since we were relatively frugal early and invested the extra, we’ve been able to invest less and spend more in recent years, even after I reduced my work and income substantially. Compound interest (or more accurately, compound growth) is truly a beautiful miracle to behold, when the slope of that curve starts to really increase.
Re: surgery. I think this depends a lot on your previous fitness, age, and what type of surgery. Was it spine or joint? Recovery from anything – from an ankle sprain to heart surgery – certainly has taken me longer after 50. I neglected my fitness for a while, but due to increasing trouble from a-fib, I started to get in shape again 2.5 years ago. I had an ablation one year ago, and feel like I’m in great shape now. But it takes a lot more attention to workout frequency/intensity/recovery, nutrition and sleep, than it used to. Even missing exercise for a week due to illness or travel sets me back a bit now.
Thanks for sharing your perspectives. Regarding frugality, I feel like I am starting to break free of the mold and make purchases that are within my means without the mental agony that I used to develop. However, I still have some guilt on occasion. Interestingly enough, I too now save less and am spending more than before, despite making less money doing my part-time gigs.
Regarding my surgeries, there were two and both were soft tissue procedures (deltoid ligament repair and labral reconstruction). I have been trying to get back in shape this year, though I have had a couple of setback. Fortunately, each setback has passed and I have recovered, but I have noticed that each injury has taken longer to heal despite only being in my thirties. Glad you are doing well and hope that you continue to manage your health and finances well!
About surgery, I’m a little biased as I am a DO But I do recommend osteopathic manipulation post surgery. I had several major surgeries prior to going to school at 35yrs old and I was having trouble with full recovery until I had manipulation and now I’m possibly stronger and more sligned/ balanced especially on my mountain bike than prior.
Hx: Several concussions, 2 ACL repairs per knee, lots of broken bones, multiple back injuries…
Thanks for the tip, Paula. I will have to go to my local DO, as I used to go regularly prior to surgery to help with pain but have gone rarely since. Glad to hear that you have recovered well yourself!
At the start of my FI journey, I was starting to fall into the trap of not spending anything. Or not wanting to spend anything. My wife and I established a spend target at the beginning of the year and I’d monthly update where we were towards it. At times, it was obvious that we had money to spend and “needed” to spend it. This allowed us to not stress about some spending and actually still encouraged us to find “value” in things…..it allowed for more spending on luxuries.
I would also tell you to find in your budget some assigned space for charitable donations. There is nothing better to cure the inwards looking that can happen with money. I’m a huge fan of DAFs.
Good luck on returning to 100%.
Thanks for sharing your story, too. I like the way you created a spending target that you “needed” to spend, it is interesting how psychology works. I will have to give that a try!
Regarding DAFs, it is interesting you bring them up. I recently was playing around in Fidelity Charitable learning how DAFs work for a future article. I think charitable giving provides a cure, as you mention and DAFs are an interesting twist to donations.
Great article, I really enjoyed how you never mentioned privilege!
You have worked hard and been frugal
for years and it’s paying off, congrats.
For me spending on things that I enjoy, for me it’s travel, experiences and fine dining. I drive a ten year old suv and don’t dress to impress.
Never had any major surgeries but hope you make a full recovery.
Thank you for reading my story and for the kind words, I appreciate it! It has been a journey to get to this point and I wake up each day thrilled that I can call it my life. I too enjoy travel and fine dining, though much more of the latter given COVID restrictions. I wish you the best on your journey!
Olaf, the Mile High Finance Guy
What are you doing now for health insurance since you are only working part-time?
Currently I am on COBRA and plan to stay on it until sometime next year when my fiancé and I get married. While COBRA is substantially more expensive than the open marketplace, my maximum out of pocket is much less. Additionally, our current budget accounts for the higher premiums through COBRA, so we would be okay if I went to a less expensive plan. I just am nervous to do so given my recent medical history.
Olaf, the Mile High Finance Guy
Thank you for the interview opportunity, PoF!
Absolutely — thank you for participating.